Personal Loan

Top 10 Important Documents Required for a Personal Loan


Personal loans are unsecured loans used to cover personal financial needs. These may include medical costs, holidays, education, weddings, and so on. Personal loan documents vary depending on whether applicants are salaried or self-employed.

About Personal Loan

A personal loan does not need collateral and is available with little paperwork.

This loan can be used to meet any valid financial need. You must return it in line with the terms agreed upon with the bank. Typically, this might range from a few months to several years.

Benefits of a Personal Loan Finance

Personal loans’ approval procedure is rapid. This is how it is different from other sorts of loans. Other types of loans include home loans or gold loans, which require more paperwork.

Several financial institutions provide personal loan digital services. If the lender is sure you can pay back the loan, the money is sent to you within a few hours.

Another key feature of a personal loan is that lenders allow you to pick your loan term. Personal loans often have terms ranging from 1 to 5 years. You may choose the loan period based on your repayment ability. You should choose a shorter loan term to save money on interest. This would even allow you to repay the debt faster.

Documents Needed for Personal Loan Finance


Proof of identity (any one of the following):

  1. PAN Card
  2. Passport
  3. Aadhaar Card
  4. Voter’s ID
  5. Driver’s License

Proof of address (any one of the following):

  1. Telephone or electricity bill
  2. Passport
  3. Aadhaar Card
  4. Driver’s License
  5. Ration Card

Proof of income:

  1. Salary slips for the past 3 months
  2. Bank statements

Proof of taxes paid:

  1. Form 16
  2. IT Returns for the past 2 years

Proof of ownership of the residence (any one of the following):

  1. Documents of property
  2. Utility bills, i.e., the electricity bill
  3. Bills of maintenance charges

Job continuity proof (any one of the following):

  1. Certificate of current employment
  2. Appointment letter for current job 
  3. Certificate of job experience

Passport-sized color photographs are also needed.


Personal loan documents needed by employed individuals and self-employed applicants are the same. It is only different with proof of employment and proof of income.

Proof of the existence of business:

  1. Proof of business registration
  2. Registration license for business
  3. GST registration slip

Proof of income:

  1. IT returns of the past 2 years
  2. Tax audit report
  3. The balance sheet of business
  4. Profit and loss accounts
  5. Bank passbook for the past year

Essential Personal Loan Documents

Some of the crucial personal loan documents you must submit include:

  1. Proof of income
  2. Proof of residency 
  3. Certified copies of your diplomas and licenses (for self-employed applicants only)

Other Eligibility Criteria for Personal Loan Finance

Personal loans are available to the following individuals:

  1. The staff of private limited firms and public sector entities 
  2. Employees between the ages of 21 and 60 
  3. People who have worked for at least 2 years, and at least 1 year with the present employer
  4. A monthly net income that is at least Rs. 25,000

How Much Can You Borrow Under Personal Loan Finance?

The maximum amount you may borrow is determined by your income level, and career. The lender’s valuation of your proposal also determines your loan amount. In general, lenders approve loans based on their calculations. This way, the EMI does not exceed 40%–50% of your salary. Also, lenders assess if you have any outstanding debts when computing the loan amount.

If you operate a business or work for yourself, the lender will base the loan amount on the profits recorded in your profit and loss account. If you are a salaried employee, the amount will be determined by your salary and other duties.

Joint Personal Loan Finance

There is a huge benefit to registering for a personal loan with a co-borrower. It is true that lenders will take both applicants’ income into account when fixing the loan amount. This implies you can apply for a larger loan. 

However, make sure your co-borrower does not have a poor credit record. If so, the lender may reject your loan application.

Things to Remember Before Applying for Personal Loan Finance

  • Personal loan interest rates are often higher than those paid for other forms of loans. This is because personal loans are unsecured loans. The interest rate on a personal loan might range from 10.99% to 22% per annum. 
  • A variety of criteria are considered when setting the interest rate on a personal loan. Some of these include the loan’s term, the borrower’s credit rating, and the ability to repay.
  • A personal loan‘s payback period might range from 1 year to 5 years.
  • Your credit score is an important factor in the acceptance of a personal loan. This is also known as a CIBIL score. To be qualified for a personal loan, most banks need you to have a credit score of 750 or above.
  • When a bank or financial institution is unsure about a borrower’s ability to repay a personal loan, it is common for them to need a guarantor. If you sign up to act as a guarantor for a loan, you agree to be liable for paying personal loan EMI payments if the debtor is unable to do so. However, remember this before accepting to be a guarantor for a loan: late payments by the borrower have a negative influence on your credit score.


Personal loans are the answer if you want to support a few expenditures with flexible repayment choices. To get more information, read more Piramal Finance blogs!